In the modified terms and conditions version, the Gemini crypto exchange specifies that it has no obligations to users who bought GUSD on other platforms.
According to Forbes, Gemini emailed its customers to announce its updated terms and conditions, which seek to retroactively waive users’ rights to sue Gemini or participate in class action lawsuits. As per Gemini’s website, the page was updated on Dec. 14.
The document reads:
“If you are not a Gemini Customer, by obtaining or using the Gemini Dollar, you agree and understand that obtaining or using the Gemini Dollar does not create or represent any relationship between you and us or you and any Gemini Service Provider and does not subject us or any Gemini Service Provider to any obligations whatsoever as they relate to you.”
Gemini’s customers were left wondering if they would ever see their money again after the exchange announced on Nov. 16 that Genesis Global Capital, the cryptocurrency lender it partnered with for the Gemini Earn program, had stopped withdrawals.
Withdrawals were prohibited after Genesis lost more than $1.8 billion due to bad loans it made to crypto companies that had filed for bankruptcy, including the infamous Sam Bankman-Frieds Alameda Research hedge fund and the hedge fund Three Arrows Capital, which failed in July. According to the Financial Times and a source cited by Forbes last week, Gemini Earn owes clients about $900 million.
In September 2018, Gemini announced the introduction of its stablecoin GUSD. When Gemini Earn launched in February 2021, its stablecoin was one of its main selling points. On Gemini Earns, a whole section was devoted to GUSD, claiming that customers could anticipate stablecoin returns to outperform inflation.
In the dozens of tokens available for loan through Gemini Earn, the rate of return offered on Gemini Dollars was frequently the highest, evidenced by the archived links to the Gemini Earns webpage. GUSD went live on Gemini’s Earn platform in June 2021, starting with the highest annual return of any coin at 7.4%.
In September 2021, this number increased to 8.05%, where it stayed until April. After that, it dropped to 6.9% before climbing again to 7.15% in July. Genesis, which lost the money to cryptocurrency hedge fund Three Arrows Capital, filed a claim for $1.2 billion that same month.